Bitcoin is a legal currency. Now, take your time and get it out of your system. Please take a deep breath. Is your blood pressure still elevated? Okay, so let’s try this.
What does fiat mean? arbitrary orders or statutes; Fiat currency is given value by government authority. They have value because the state finds them valuable and accepts them as payment for taxes. So, what is the legal currency of Bitcoin?
The king relinquishes his hand and gives it a legal value. However, there is no king of Bitcoin. right? Wrong. That’s us.
We collectively give value to Bitcoin through our decisions to use it. We make it happen through collective arbitrary decisions. Despite all the memes and descriptions of Bitcoin as digital gold, Bitcoin is never a commodity. Bitcoin has no clear use or exchange value. It is not a physical raw material that can be transformed into something else. This is a database that resides on your computer. And mine. And everyone else’s too.
The only reason Bitcoin is so consistent and unique in the first place is
Everyone’s arbitrary decision to use the same rules to validate changes to the database. Without it, Bitcoin would be nothing more than countless copies of competing databases in different states around the world. Bitcoin doesn’t exist, so it can’t have value.
Its use value is its exchange value. They are two sides of the same coin, brought about by purely collective statutory decrees.
Bitcoin may be hard money and may have a finite supply, all of which may have the potential to change global economic incentives. But it’s also a Fiat. Every property it has, everything it exists, exists purely by virtue of our collective and arbitrary decision to let it exist.
Bitcoin is the world’s first stateless legal currency.
This article is a take. The opinions expressed are solely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
